Editor’s note: A shorter version of this interview will run in the Aug. 13 print edition of The Observer.
LOCATION: Explain why Amtrak wants New Jersey Transit’s planned ARC (Access to the Region’s Core) tunnel under the Hudson River to connect with the Penn Station tracks.
Mr. Kummant: Basically, look, this goes back to a process we’re leading, which is a process for the whole Northeast corridor. And, at the end of the day, we’re in a completely different world, where capacity matters a great deal. You’re looking at 2030 projections where commuter volume and Amtrak volume in total is almost doubling. So, if there aren’t capacity solutions in Penn Station, that’s a big deal.
And the other thing I would say is that, fundamentally, we’re in a very different world than we were even three years ago. On all these projects, frankly, there was capacity everywhere–a lot of these things were done on handshake deals; a lot of things could kind of be done locally because you knew, ‘Oh, you can kind of muddle through, there’s enough capacity.’ Today, suddenly everything’s so constrained and demand’s so high that you can have Penn Station issues that ripple back into trains initiating in Pennsylvania.
So, the entire planning world has gotten dramatically more complicated. So, I would just say, ‘Capacity, capacity, capacity.’
So the idea’s to alleviate that?
Yes. It’s basically north-south intercity transportation capacity. If you broaden it out and if you look at the congestion at the airports in New York, one of the answers is more intercity passenger rail. If you look at where we are in market share–if you combine air and rail–we’re at 60-plus percent share between New York and D.C., for example.
So, if you take the Moynihan project [the redevelopment of Penn Station], our folks have always talked in terms of … the sort of three C’s. There’s the little C in terms of capacity, which is vertical capacity–just getting more people to flow through the station, more accessibility. There’s the middle C, which is can you just manage trains a little bit better with today’s aggregate north-south capacity, a little more kind of within the station itself. And then there’s the big C, which is major north-south capacity.
So that’s really where we’re coming from.
Have you heard anything lately from New Jersey Transit about ARC?
We talk all the time. Look, we’re very supportive of ARC. Clearly, it’s a critical project for New Jersey. All we have said is that north-south capacity matters. We’re not enemies; we’re not in a fight.
But their response would be how do you pay for that connection from the tunnel to Penn?
I don’t know chapter and verse of the arcane of how the [Federal Transit Administration] funds. And, again, I would remind folks that we’re not a federal agency; we’re not a regulatory agency; we’re not a funding agency. But, basically, you can use the same avenues. We were just suggesting that if you go down the path of spending large amounts of federal dollars on this project, it might make sense to look at total north-south capacity.
So, if there’s not a connection? I have a letter from you to the ARC project manager at New Jersey Transit referencing ‘a fifth trans-Hudson tunnel.’
We’re just saying that all the connectivity matters. And if there’s no connection, we just have to all be clear-eyed about it. At some point, if you’re looking at an intelligent plan for the entire Northeast corridor, the nexus of New York City is the single most important capacity constraint on the whole system. So, at some point, there’s going to have to be some sort of connection or another tunnel. That’s just a truism; that’s just reality.
Do you have a timetable on that?
No. That’s just a statement, which is if there’s no capacity that comes to the north-south flow through New York City, all we’re saying is at some point there’s going to have to be a solution in order to meet all of the planning projections of all the transportation entities north and south of New York.
In a letter to The New York Times in November 2007, you wrote that, ‘All our project partners agree that our primary purpose is to create a world-class station’–this is about Moynihan Station–‘that vastly improves the experience of passengers as they enter and leave New York City.’ Would Amtrak be happy with the scaled-back Moynihan, where Madison Square Garden doesn’t move?
Look, again, I don’t think I’m here to take positions on one plan or another. And I’ll be perfectly frank: I know that the plans are always in a state of flux. We are very supportive of anything that enhances the passenger experience; and New York City and Penn Station customers can benefit from a great station.
It only becomes more difficult to make the business case if there’s no capacity [improvement] associated with that. … We’re not the developers. I would just say you can’t necessarily be against a better station, and that’s not the point. The point is, I think, the economics get more difficult. But, again, we’re not the developers.
Would Amtrak consider moving to the Farley Post Office from Penn, especially if that’s going to be the entrance to the train station?
Well, generally, as we’ve looked at it that case gets very difficult to make without additional capacity. If there really were additional capacity, if there were some sort of fairly dramatic improvement in capacity, I think that would be more likely. But I think the business case gets difficult to make.
You’ve mentioned capacity. I just want to clarify what you mean by that.
More slots. It’s just more trains, north-south.
How do you do that, though–without extra tunnels, without extra platforms, sharing the rail with freight?
You don’t. The point is we spent a long time working with NJT on the original concept, which was the tunnel into Penn. That was always one of the pieces of the conversation; so it was about actual, physical additional capacity.
There’s also another concept, which is Block 780, which is currently the underground space south of Penn Station. You need actual tracks and platforms–that would be an area where you could put additional actual capacity in terms of station track and platform.
Is Amtrak in talks right now with the Empire State Development Corporation, Related Companies, Vornado Realty Trust–the developers of Moynihan Station?
We’re always in a constant process with them. We’re good friends; we have existing project teams that are always in touch.
You haven’t heard anything very recently?
I personally have not. I don’t mean to dodge that. All I know is that the working teams are always in the middle of various scenarios.
I only ask because Governor Paterson said something on the radio yesterday [Aug. 5] about wanting new plans for Moynihan.
I think I saw that press report as well, and so I don’t know if there’s another set of conversations that are being started at this moment. I can’t answer that.
We touched on this earlier, but the ridership for Amtrak has been increasing, nationwide and in the Northeast. A lot of Northeast trains are literally sold out during peak hours. How does Amtrak expect to keep up with the demand?
Well, that is the question, is it not? We have said repeatedly and we’ve said in front of Congress that our most desperate need right now is to really begin a whole cycle of equipment procurement.
By the way, parenthetically, I might point out an interesting factoid: People need to remember that one in five of our riders are in California; and, in fact, the Pacific Surfliner, the line between San Luis Obispo and San Diego, actual exceeded the Acela in ridership last month.
So, look, we’ve had a number of great discussions on the Hill. I think there are a lot of people that are very supportive and are trying to help us with that. There’s a number of things we need to look at: coalitions with states; the [congressional] reauthorization has a provision for capital matching funds which can be applied toward equipment–we encourage the states to look in that direction; we would certainly welcome more capital in order to do that. We’re also, frankly, in the middle of working on a very detailed plan to say, ‘Here’s very specifically what we need.’
The Northeast corridor itself, the equipment needs are big enough that that may in the end have to be a stand-alone appropriation.
Are there any plans to privatize the Northeast corridor?
You mentioned Acela earlier. As far as the shorter, two-hour train between D.C. and New York, is that going to happen?
Not with the current structure and the current funding. And not with eight different commuter agencies and 750,000 commuters on the Northeast corridor and 50 freight trains and a Civil War-era set of Baltimore tunnels.
Why is it brought up then?
I’m not bringing it up.
I know. Not you. Mayor Bloomberg spoke about it.
I understand why people say this, but if you get into the actual railroad operation issues–let me give you this: You’re talking about billions of dollars to do that.
At the end of the day, we have over 60 percent of the air-rail market share as it is; I would argue if you have an incremental $5 billion, we should probably rebuild every station we have and focus on connectivity with great parking, great bus connections and everything else–you would really drive ridership.
I’m not suggesting these are hugely competing visions. If somebody wants to do the heavy political lifting of $30 billion to do [the two-hour train], hey, that’s great. I just think what I don’t want to do is suck the wind out of capital funding for everything else around Amtrak. There’s an awful lot we can do for single-digit billions, and that’s one of the things we keep pointing out. You can do an awful lot at 100 to 110 miles per hour. And, I think, given the overall funding, the state of the federal budget, the state of the states’ budgets, I think it’s far more realistic and pragmatic to pursue efforts in single-digit billions and single-digit years.
If you start doing dedicated, brand-new, right-of-way high-speed–and that’s what that would have to be–you could not do it along the existing system. First, you’ll be in court for 10 years; and then you’ll be under construction for another 10 years.
These are great ideas–and, look, I applaud high-speed; it’d be wonderful to have high-speed. We’re guys who run a nuts-and-bolts railroad who try to do stuff. So, with single-digit billions and single-digit years, I think we can dramatically increase ridership.
So, it’s a matter of infrastructure and funding for a high-speed D.C.-New York train?
It’s everything. First of all, you have to have a dedicated line to accomplish that.
A dedicated rail line?
That’s right. You cannot have commuters on it. Again, we run 750,000 commuters a day on our line. You can’t have any freight trains–we run 50 freight trains a day. You have to have completely different curvatures. You have to have different tunnels. And, again, wonderful, great, they’re vision statements; but, at the end of the day, you have to spend tens and tens of billions of dollars to do that. Then you have to ask yourself, ‘Is that really where you would put that capital?’
We continue to hear about, ‘Gee, how much more could be done?’ Fine. Maybe you can capture the other 40 percent [share of intercity Northeast air-rail commuters]. But I would argue you could capture that if we had new equipment; you could expand our capacity with new equipment; you could, again, drive the connectivity of the stations; you could make much higher-quality stations that basically drive connectivity with local operations. And I have little doubt that you could pick up another 20 points in share.
Amtrak has a very good on-time rate, especially compared to airlines. But what does cause the delays in the Northeast?
First of all, you’re talking about one of the most complicated pieces of railroad in the world. And I want to say that out loud: 1,900 train movements a day in the Northeast corridor; you’ve got minute headways between trains going out of Penn in rush hour. So, all you need is one hiccup; if you have one equipment issue; we do have a complicated operating arrangement with [the Metropolitan Transportation Authority] north of New York City, for example–if we miss a [time] slot there by a couple minutes, we’ll end up being 25 minutes late out of Penn going south.
You’re talking about a very, very precise railroad. Look at our on-time performance between New York and D.C., that’s 90-plus percent right now. In the north, we have had an issue that we’re working through in the next couple of months on slow orders with some tie issues; that’ll be fixed in a couple months and I expect that on-time performance to get better.
Let me give you another example in terms of south-bound in the tunnels. There’s two tunnels [out of Penn], but actually we have so much track and tie work we do there that basically on weekends and nights we run a one-track railroad, a one-tunnel railroad. Every night and every weekend, we are taking one of those tunnels out of service because we’ve got so much tie and track replacement we need to do. So, another issue with connections is to have much more redundancy, parallel operations, being able to move traffic on various tunnels. The lack of a connection to Penn with ARC completely takes that off the table; that would’ve been a benefit if there were a connection as well. And that effectively becomes capacity in a broad sense–it allows you to react to conditions in a broad sense.
Fares went up 5 percent on several routes in July, including in the Northeast. Can you explain how Amtrak sets prices?
Basically, in the Northeast, we would say we stay with the market. We have a management program that is not dissimilar from the airlines–I know that’s a dangerous thing to say in the current era. But if you look at walk-up fares, they’re similar to what you’d charge for the air routes around the Northeast corridor. The quick answer is we believe we’re pricing at market.
But pricing at market–Amtrak has a monopoly on passenger rail?
It doesn’t have a monopoly in terms of transportation. You can take a bus, you can take an airplane, you can drive.
O.K. The latest increase came, though, as gas prices were driving up the costs of driving and flying. Not that Amtrak is gouging people, but there’s the whiff of that–that, suddenly, during this summer, when gas prices were just teetering over $4 a gallon nationally on average, Amtrak’s fares went up again.
Well, our energy costs went up, too. We’re also seeing record inflation on everything–on commodities, on copper, on health care. So, the answer is yes; I’m entirely unembarrassed about that. That is the market.
Are there any more fare increases coming in 2008?
I’m sure. There’s going to be increases from now until eternity every year, unless we have a radical deflationary environment, which I doubt.
Look, let me not be too glib there. That’s a little bit of the micro, what we do day to day, what’s the market answer. The bigger answer is this: One can have, I think, a very realistic national discussion about subsidized travel. In order to do that, though, you need to say, ‘We need a balanced transportation policy,’ where people sit down and plan corridors on tradeoffs with rail, air and highway. That doesn’t really occur today; we’re left with a legacy system. And, in fact, we are basically running Amtrak on the basis of the funding that we’ve gotten over the last 10 years. So, the slightly glib answer is, ‘Talk to your congressman,’ because, in a sense, if we were to operate in a very different financial profile and there were an explicit discussion on what transportation should be subsidized and which should not, you might have a different answer.
We are simply, also, I would say, responding to the realities of our financial situation. Now, that being said, if you go to individual states, when we contract with states, states often control directly the prices of our state offerings. So, the states at times make very specific choices to say, ‘We’ll essentially price below market. We’re going to offer a more clearly subsidized product to the market.’ They make up the difference to us in terms of fees they pay us directly. So there are state routes where you can compare in terms of mileage where you can say, ‘Wow, this one’s less than it would be on the Northeast corridor?’ The answer’s yes and that’s because the state has chosen to create that price structure.
What about doing away with some of the cross-country routes?
That’s an old debate. I think reasonable people can debate that. And let me start on a couple of different directions. One is do we believe that our overall offering and our overall network is exactly what we’d like it to be? Of course not. We’d like to have better stations, newer equipment, better on-time performance. The reality is, and I’ve said this before, if you were to blow away all the long-distance product, you would never get it back.
One of the things I strongly believe is we are on a path, and if you look at, by the way, the ridership on the long-distance products, they’re up–let’s see–in July, they were up 12 percent year over year. So we’re seeing dramatic growth in long-distance, which, in many cases, runs along what we would call the corridors of the future. You look at the Sunset West–you’ve got Phoenix to L.A. In your and my lifetime, there is going to be a serious high-speed or near-high-speed product offering between Phoenix and L.A.; it has to happen. And one of my arguments would be if you take all of Amtrak’s long-distance product away, you’ll eliminate the remaining vendor base; you’ll eliminate facilities; you’ll eliminate the workforce. It will be that much harder to get it back.
So, I would argue that we’re on a path here to really create a serious national network; and, look, five to 10 years from now, I would argue that we would probably have a much more robust 100- to 500-mile corridors and some center slivers of long-distance connections because the networks still matter.
Very quickly: Are there plans to increase the frequency of service between Penn Station and Albany?
We are looking at an express service there. We can get back to you on those details, but that’s clearly an important corridor for us. I know that one of the things we would want to do is look at additional service there.
Are you talking about Acela-like trains?
No. But there are stretches there where we can run 100 miles an hour.
Does Amtrak have a favorite in the presidential election? I’m only asking because Senator McCain has made comments in the past about Amtrak.
Even if we did, we wouldn’t answer that question. We have to be very apolitical. But let me give you the real answer. The real answer is, if you look historically, there’s very little correlation with the party of the occupant of the White House relative to Amtrak’s fortunes. In fact, some of it has been counterintuitive. What I would say is what we’re hoping for–and there’s nothing on the horizon here–is just a thoughtful–and I’m not saying we don’t today; we have a very thoughtful Secretary of the [Department of Transportation]–but Amtrak’s fortunes often are closely linked with the interests of whoever runs the Department of Transportation.
So, no, A, we wouldn’t answer that. And, B, I would say if you look at it historically, there’s very little effect on Amtrak relative to who occupies the White House.
Do you think that will be the case going forward, especially if the price of gas keeps going up?
Let me put it this way: We’re in a different world today from a transportation point of view. We’re seeing dramatic growth; we’re seeing dramatic needs; we’re seeing the airlines pull back in capacity. The country tends to react in these large issues in crisis; and, I think, yeah, we are in a transportation crisis. Will something happen overnight right now? Probably not.
But I would also argue there are, in a sense, major issues that are converging. One is clearly energy. The other’s the infrastructure crisis. The other is a very different environmental consciousness than 10 years ago. And that’s really coming together in terms of a core, blended issue. We cannot peel away the energy question from transportation because that’s where our oil is spent. You cannot peel away a real question of federal infrastructure spending because we’ve got so many problems with highway spending; and, in my view, we have so dramatically underspent on passenger rail that we have to belly up to the bar here and really look at a much higher rate of infrastructure spent relative to GDP.
In general, we have to have a balanced national transportation policy, where we truly make tradeoffs between air, rail and highway.
Can that happen?
Absolutely it can happen.
We can come full-circle here on capacity for the Northeast corridor: We’ve got a very thoughtful group from all the states between Maine and Virginia talking about a master plan for the Northeast corridor. Well, when you look at the very difficult air traffic congestion in New York, rail has to be an answer. If you look at the airports, a lot of the departures from the airports are flights that are 400 miles or less. The sweet spot for rail in the future is kind of 100- to 400-mile corridors. And again, I think, the market share we own between D.C. and New York is really emblematic of what we could do across the nation if we get serious about that: Chicago-Detroit; Detroit-Minneapolis; Chicago-St. Louis; St. Louis-[Dallas-Fort Worth]; Phoenix-L.A.; L.A.-Vegas would be a huge one; corridors within Florida; extending the Northeast corridor south to Richmond and then Richmond to Charlotte.
And another piece here is there is a bit of a social cultural movement back to the city centers; and that’s congruent with what rail does.
Besides geography, why were Western Europe and Japan able to develop high-speed rail?
Well, one of the things that we always say is that something came before TVG [the high-speed French train] as well. The fact is you had a more densely populated area; you had a history of passenger rail because freight worked very well on barge and on highway in those fairly limited geographies. …
We, from the get-go, with sort of the miracle of both the American geography and political system, we’re trying to move goods from Iowa to New York City–so our rail system in the last 30 to 40 years has been the envy of the world from a freight point of view. And so it’s just a different history.
And now if you overlay that, frankly, with our legal systems today–when the French government wants to build an arrow-straight line from Paris to Brussels, they can do it. We’d be in court for god knows how long with lawsuits from every community. So, there’s a number of different issues at play here.
But, again, I think we can go about building a big system on existing right-a-ways in partnerships with the freight railroads for single-digit billions; and that can move a lot of people at 100- to 110-mile-per-hour speeds.
And, again, I want to get back to ARC and Moynihan: The main point is we’re just in a very different world today. And I think that this dialogue would’ve sounded very different five years ago because a lot of these things could be dealt with locally–plenty of capacity, no big regional issues. All of a sudden, we’re out of capacity; there’s less airline capacity; and, wow, you get ripple effects that can ripple all the way from New Rochelle to Pennsylvania in terms of how our rail system works.
But, if circumstances have changed so much, is there just some sort of dissonance between Amtrak and the commuter rails. Is everybody on board with the same vision?
Not necessarily. But I would say it’s become harder. … You could get by with handshakes; the rail operating guys could get together and say, ‘Well, the suits kind of made this deal but we’ll make this work.’ Today, things are so tight that you have to have specific legal agreements about specific time slots; and that creates a lot of tension and friction with any kind of commuter or regional deal you try to make.
It’s much harder to do it. It’s just a much tighter world with a lot less slack. And I don’t think that it’s necessarily that people, in the end, disagree or are enemies or don’t agree that, ‘Wow, we have to figure this whole thing out.’ It’s just a lot harder to do.